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EXHIBIT 2.7
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
between
BROOKDALE DEVELOPMENT, LLC,
a Delaware limited liability company
and
ALLIANCE HOLDINGS, INC.,
a
Pennsylvania corporation
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Dated as of December 1, 2005
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is made
as
of December 1, 2005, by and between ALLIANCE HOLDINGS, INC., a
Pennsylvania
corporation (the "Company"), and BROOKDALE DEVELOPMENT, LLC, a
Delaware limited
liability company (the "Purchaser").
WITNESSETH:
WHEREAS,
the Company owns all of the issued and outstanding membership
interests (the "Subject Interests") in AH Battery Park Member, LLC,
an Ohio
limited liability company ("Battery Park Member"); and
WHEREAS,
Battery Park Member owns all of the issued and outstanding
membership interests (the "Battery Park Membership Interests") in
AH Battery
Park Owner, LLC, an Ohio limited liability company ("Battery Park
Owner",
collectively, Battery Park Owner and Battery Park Member are the
"Battery Park
Entities");
WHEREAS,
the Subject Interests and the Battery Park Membership Interests
are described on Exhibit A attached hereto; and
WHEREAS,
Battery Park Owner leases and holds leasehold title to certain
real property located in Battery Park, New York (the "Real
Property"), on which
a senior independent and assisted living facility, known as The
Hallmark at
Battery Park, is located (the "Facility");
WHEREAS,
Purchaser has offered to purchase from the Company, and the
Company has agreed to sell to Purchaser, the Subject Interests for
the price and
upon the terms and subject to the conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and
conditions
hereinafter set forth, and for other good and valuable
consideration, the
receipt and legal sufficiency of which are hereby acknowledged, the
parties
hereto hereby agree as follows.
1.
DEFINITIONS.
1.1
Defined Terms. As used in this Agreement, the following terms
shall
have the following meanings:
"Affiliate" with respect to any Person means any other Person
directly or
indirectly controlling or controlled by or under direct or indirect
common
control with such Person. For the purposes of this definition,
"control" when
used with respect to any Person means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" shall mean this Agreement, together with the Exhibits,
in each
case as amended, restated, supplemented or otherwise modified from
time to time.
"Applicable Law" shall mean all applicable provisions of all
(i)
constitutions, treaties, statutes, laws, rules, regulations, and
ordinances of
any Governmental Authority and common
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law duties, (ii) Consents of any Governmental Authority and (iii)
orders,
decisions, rulings, judgments, directives or decrees of any
Governmental
Authority.
"Battery
Park Entities" shall have the meaning set forth in the
Recitals.
"Battery
Park Member" shall have the meaning set forth in the Recitals.
"Battery
Park Membership Interests" shall have the meaning set forth in
the Recitals,
"Battery
Park Owner" shall have the meaning set forth in the Recitals.
"BLCI"
shall mean Brookdale Living Communities, Inc., a Delaware
corporation.
"Business
Day" shall mean any day that is not a Saturday, a Sunday, or a
day on which banking institutions in the City of Philadelphia,
Pennsylvania, are
authorized or required by law to close.
"Closing"
shall have the meaning specified in Section 2.2(a).
"Closing
Date" shall have the meaning specified in Section 2.2(a).
"Company"
shall have the meaning set forth in the Preamble.
"Company Indemnified
Parties" shall have the meaning specified in Section
6.2.
"Company's
Knowledge" means the actual knowledge without investigation of
David B. Fenkell and John D. Hollyday.
"Consent"
shall mean any consent, approval, authorization, waiver,
permit,
grant, franchise, license, exemption or order of, or any
registration,
certificate, qualification, declaration or filing with, or any
notice to, any
Person.
"Facility"
shall have the meaning set forth in the Recitals.
"Governmental
Authority" shall mean any nation or government, and any
state or political subdivision thereof, any entity exercising
executive,
legislative, judicial, regulatory or administrative functions of or
pertaining
to government, and any court, tribunal or arbitrator(s) of
competent
jurisdiction, and any self-regulatory organization.
"Indemnified Party" shall have the meaning specified in Section
6.3.
"Indemnifying Party" shall have the meaning specified in Section
6.3.
"Lien"
shall mean any lien (statutory or other), pledge, mortgage, deed
of
trust, assignment, deposit arrangement, priority, security
interest, adverse
claim, charge or encumbrance or other preferential arrangement of
any kind or
nature whatsoever (including, without limitation, the interest of a
lessor under
a capital lease having substantially the same economic effect), any
agreement to
give or refrain from giving any lien, pledge, mortgage, security
interest,
charge or other encumbrance of any kind, any conditional sale or
other title
retention agreement, any lease in the nature of any of the
foregoing and the
filing or existence of
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any financing statement or other similar form of notice under the
laws of any
jurisdiction or any security agreement authorizing any Person to
file such a
financing statement, whether arising by contract, operation of law,
or
otherwise.
"Losses"
shall have the meaning specified in Section 6.1.
"Mortgage
Loan" shall mean the loan described on Exhibit B attached
hereto.
"Mortgage
Loan Documents" shall mean agreements and other documents
evidencing or securing repayment of the Mortgage Loan.
"Notices"
shall have the meaning specified in Section 7.1.
"Organizational Documents" shall the articles of organization,
certificate
of formation or certificate of organization and limited liability
company
agreement or operating agreement of a limited liability
company.
"Person"
shall mean any individual, trustee, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association,
corporation, limited liability company, limited liability
partnership and other
entity or any Governmental Authority.
"Purchase
Price" shall have the meaning specified in Section 2.1.
"Purchaser" shall have the meaning set forth in the Preamble.
"Purchaser
Indemnified Parties" shall have the meaning specified in
Section 6.1.
"Real
Property" shall have the meaning set forth in the Recitals.
"Subject
Interests" shall have the meaning specified in the Recitals.
"Tax" or
"Taxes" shall mean all federal, state, local, foreign and other
net income, gross income, gross receipts, sales, use, ad valorem,
transfer,
franchise, profits, license, lease, service, add on or alternative
minimum,
occupancy, withholding, payroll, employment, social security,
excise, severance,
stamp, value added, occupation, premium, property (including,
without
limitation, real property and any assessments, special or
otherwise), windfall
profits, customs, duties or other taxes of any kind whatever,
together with any
interest and any penalties, additions to tax or additional amounts
with respect
thereto.
"Third
Party Claim" shall have the meaning specified in Section 6.3.
"Transaction Documents" shall mean this Agreement and all other
agreements
and instruments referred to herein to be entered into by the
parties referenced
therein in connection with the consummation of the transactions
contemplated
hereby and thereby.
1.2
Headings; Construction and Interpretation. The headings in this
Agreement are for convenience of reference only, do not constitute
a part of
this Agreement and are not to be considered in construing or
interpreting this
Agreement. All section, preamble, recital, exhibit, schedule,
disclosure
schedule, annex, clause and party references are to this Agreement
unless
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otherwise stated. No party, nor its counsel, shall be deemed the
drafter of this
Agreement for purposes of construing the provisions of this
Agreement, and all
provisions of this Agreement shall be construed in accordance with
their fair
meaning, and not strictly for or against any party.
2. SALE AND PURCHASE.
2.1 Sale
of the Subject Interests. On the Closing Date, and upon the
terms
and subject to the conditions set forth in this Agreement, the
Company shall
sell, transfer and assign to the Purchaser, and the Purchaser shall
purchase
from the Company, all of the Subject Interests for the aggregate
purchase price
of One Hundred and no/100 Dollars ($100.00) (the "Purchase Price").
The
Purchaser acknowledges and agrees that it is purchasing the Subject
Interests,
and accordingly, is acquiring the equity interests in, and assets
of, Battery
Park Owner, subject to the Mortgage Loan and all liabilities
relating to the
Facility and the maintenance of the existence of the Battery Park
Entities.
2.2
Closing.
(a) The closing of the purchase and sale of the Subject
Interests
(the "Closing") shall take place at 4:00 p.m., local time, on
December 30, 2005,
provided all of the conditions set forth in Section 7 hereof shall
have been
satisfied or duly waived or at such other time and date as the
parties hereto
shall agree (the "Closing Date"), at the offices of the Purchaser,
or at such
other place as the parties hereto shall agree.
(b) At the Closing, the Company shall deliver an Assignment of
Membership Interests ("Assignment") transferring the Subject
Interests to
Purchaser,
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce
the Purchaser to enter into this Agreement, the Company hereby
represents and warrants to the Purchaser as follows:
3.1
Organization and Qualification. To the Company's Knowledge, (a)
Battery Park Member is a limited liability company duly organized,
validly
existing and in good standing under the laws of the State of Ohio,
has the
requisite power and authority to carry on its business as now
conducted and as
proposed to be conducted, and (b) Battery Park Owner is a limited
liability
company duly organized, validly existing and in good standing under
the laws of
the State of Ohio, has the requisite power and authority to own or
lease and
operate its properties and assets and to carry on its business as
now conducted
and as proposed to be conducted, and is duly qualified or licensed
to do
business in each jurisdiction in which the character of the
properties or assets
owned, leased or operated by it or the nature of its activities
makes such
qualification or licensing necessary.
3.2
Corporate or Other Power. The Company is duly organized and
validly
existing in good standing as a corporation under the laws of
Commonwealth of
Pennsylvania. The Company has the requisite power and authority to
execute,
deliver, carry out, and perform its obligations under each
Transaction Document
to which it is a party, including, without limitation, the power
and authority
to sell, assign, transfer and deliver the Subject Interests to the
Purchaser as
contemplated hereunder.
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3.3
Authorization; Binding Obligations. The execution, delivery and
performance by the Company of this Agreement and each of the other
Transaction
Documents to which the Company is a party, and the consummation by
the Company
of the transactions contemplated hereby and thereby, have been duly
authorized
by all requisite action on the Company's part. The sale, transfer,
assignment,
and delivery by the Company of the Subject Interests as
contemplated hereunder
at Closing have been duly authorized, or will be duly authorized
prior to the
Closing. This Agreement constitutes, and the other Transaction
Documents to
which the Company is a party when executed and delivered by the
Company will
constitute, the legal, valid and binding obligations of the
Company, enforceable
against the Company in accordance with their terms, except as
enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by
general principles of equity (regardless of whether enforcement is
sought in a
proceeding in equity or at law).
3.4
Entities. The information contained on Exhibit A attached
hereto
concerning the Battery Park Entities is true and correct.
3.5
Validity of Subject Interests. To the Company's Knowledge, each of
the
Subject Interests and the Battery Park Membership Interests have
been duly
authorized and duly and validly issued, fully paid and non-
assessable, and are,
and at the Closing shall be, free and clear of any Liens created
by, through, or
under the Company, except as contemplated by the Mortgage Loan
Documents.
3.6
Employees. None of the Battery Park Entities has any employees.
3.7
Employee Benefit Plans. None of the Battery Park Entities has
any
employee benefit or welfare plan.
3.8
Litigation. To the Company's Knowledge, there are no pending or
threatened claims, actions, suits, labor disputes, grievances,
administrative or
arbitration or other proceedings or, investigations against any of
the Battery
Park Entities or their respective assets or properties before or by
any
Governmental Authority other than those related to the Mortgage
Loan or those
known to Purchaser, BLCI or one of their Affiliates.
3.9 Asset
and Liabilities.
(a) To the Company's Knowledge, none of the Battery Park
Entities
owns any assets other than (i) equity interests in one or more of
the other
Battery Park Entity as described in the Recitals to this Agreement
and on
Exhibit A attached hereto, and (ii) other assets related to such
equity
interests or to the Facility.
(b) To the Company's Knowledge, none of the Battery Park
Entities
has any liabilities or obligations, known or unknown, fixed or
contingent, other
than (i) liabilities or obligations incurred to maintain the
existence of the
applicable Battery Park Entity, and (ii) other Liens, liabilities
and
obligations related to the Facility.
3.10
Depository and Other Accounts. To the Company's Knowledge, none
of
the Battery Park Entities maintains deposit accounts, spread
accounts, yield
supplement reserve accounts, operating accounts, trust accounts,
trust
receivable accounts or other accounts of any
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kind or nature into which funds of any Battery Park Entity are
deposited from
time to time other than those of which Purchaser or one of its
Affiliates is
aware.
EXCEPT AS
SPECIFICALLY SET FORTH IN THIS SECTION 3, THE COMPANY MAKES NO
REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE WITH REGARD TO
THE BATTERY
PARK ENTITIES, THE FACILITY OR THE FINANCIAL CONDITION OF THE
BATTERY PARK
ENTITIES OR THE FACILITY.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The
Purchaser hereby represents and warrants to the Company as
follows:
4.1
Authorization; Enforceability; No Violations.
(a) The Purchaser is duly organized and validly existing in
good
standing as a limited liability company under the laws of State of
Delaware. The
Purchaser has the power to execute, deliver and perform its
obligations under
the Transaction Documents to which it is a party and has taken all
requisite
action (including pursuant to its constitutive documents) to
authorize the
execution, delivery and performance by it of such Transaction
Documents and to
consummate the transactions contemplated thereby.
(b) The execution, delivery and performance by the Purchaser of
the
Transaction Documents to which it is a party and the consummation
of the
transactions contemplated thereby do not and will not violate any
provision of
the operating agreement or certificate of formation of the
Purchaser or of any
other agreement or instrument to which the Purchaser is a party or
by which it
is bound, or to which any of its properties or assets is subject,
or of any
Applicable Law. The Purchaser has duly executed and delivered this
Agreement
and, at the Closing, will have duly executed and delivered the
other Transaction
Documents to which it is a party. This Agreement constitutes, and
the other
Transaction Documents to which the Purchaser is a party when
executed and
delivered by the Purchaser will constitute, the legal, valid and
binding
obligations of the Purchaser, enforceable against the Purchaser in
accordance
with their terms, except as enforceability may be limited by
applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the
enforcement of creditors' rights generally and by general
principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at
law).
4.2
Consents. No Consent, authorization or order of, or filing or
registration with, any Person is required to be obtained or made by
the
Purchaser for the execution, delivery and performance by the
Purchaser of this
Agreement or the other Transaction Documents to which it is a party
or the
consummation of any of the transactions contemplated hereby or
thereby other
than those that will have been made or obtained on or prior to the
Closing Date.
4.3 Net
Worth of BLCI. BLCI has and will maintain a net worth, computed
on
a market value basis, in excess of $10,000,000.
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5. CONDITIONS PRECEDENT TO CLOSING.
5.1
Conditions to the Company's Obligations. The obligations of the
Company hereunder required to be performed on the Closing Date
shall be subject,
at its election, to the satisfaction or waiver, at or prior to the
Closing, of
the following conditions:
(a) The representations and warranties of the Purchaser contained
in
this Agreement shall have been true and correct when made and shall
be true and
correct in all material respects on and as of the Closing Date with
the same
force and effect as though made on and as of the Closing Date.
(b) The Purchaser shall have performed all obligations and
agreements, and complied with all covenants, contained in this
Agreement, to be
performed and complied with by the Purchaser at or prior to the
Closing.
(c) All governmental and regulatory approvals and clearances and
all
third-party Consents necessary for the consummation by the
Purchaser of the
transactions contemplated by the Transaction Documents shall have
been obtained
and shall be in full force and effect, provided that the parties
hereby
agreement that obtainment of a New York state or city tax clearance
certificate
shall not be condition precedent.
(d) The Company shall have received payment of the Purchase Price
as
well as payment of all costs incurred by the Company in connection
with the sale
of the Subject In
